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Provincially owned telecom firm sold at loss of almost $61 million

Ontario’s Liberal government is under fire for selling off a provincially owned telecom company at a loss of $61 million.

Progressive Conservative MPP Vic Fedeli said given how the Liberal government “bungled” the sale of Ontera, then “how are they are going to be trusted to sell Hydro One." (Richard J. Brennan / Toronto Star file photo)

The Liberal government is under fire for selling off a provincially owned telecommunications company at a $61 million loss.

Even so Northern Development Minister Michael Gravelle says it was a “necessary decision” and a good deal for taxpayers.

Ontera, which provides local and long distance telephone, data and Internet service throughout northeastern Ontario, was sold to Bell Aliant for $6.3 million — less than the $6.5 million the province paid consultants, lawyers and others advising the government on the sale.

Newly released documents from a Public Accounts report states “a loss on disposal of shares of Ontera” of almost $61 million and that the “the government provided a one-time contribution of $52,092,000 to support the sale” of the Crown corporation.

“It sure was a heck of a deal for Bell. (This) is pure Liberal math and this is exactly why we are the most indebted subnational on the planet,” Progressive Conservative MPP Vic Fedeli (Nipising), who raised the “fire sale” in the legislature, told reporters Tuesday.

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Fedeli said given how the government “bungled” the sale of a smaller asset like Ontera, then “how are they are going to be trusted to sell Hydro One, a much bigger company,” referring to the Liberal government’s plan to sell off 60 per cent of the transmission utility.

In struggling to explain the deal, Gravelle said the decision was made to cut the province’s losses. Details of the money-losing deal were outlined in public accounts documents released Monday.

Ontera was the communications division of Ontario Northland Transportation Commission (ONTC), which, among other things, used to run a heavily subsidized passenger train service until the Liberals shut it down. It currently provides bus service, rail freight and refurbishment and land development.

“The decision to sell Ontera was made on the basis that there were costs involved in the short-term but in the long-term it made no sense from any point of view to maintain ownership of this telecommunications wing. It would have been far more costly in the long run to maintain it,” Gravelle said.

“We believe it was the right decision,” said Gravelle, who avoided explaining what was entailed in the money paid to consultants and lawyers. Instead, he emphasized a further $9 million for ONTC from fibre optics agreements and a joint investment of $15 million from Bell Aliant and the province to improve access to fibre optics in northeastern Ontario.

Bell Aliant declined Tuesday to comment on news of the sale.

New Democrat Leader Andrea Horwath said the deal with Bell Aliant was a “shameful” waste of taxpayers’ dollars.

“The bottom line is this minister . . . got no value for the people of Ontario,” said Horwath, describing Gravelle’s explanation as an “after the fact justification from a minister who did wrong by the people of Ontario.”

Fedeli said despite how the minister frames it, “it’s a short-term gain for a long-term loss.”

“They have lost all the long-term benefit of having that telecom in northern Ontario.”

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